PRODUCT DEVELOPMENT
The development of the IBM ThinkPad, Part Ibig BLUE'S big ADVENTURE By Peter
Golden

In 1991, Denny Wainwright was a senior planner
at IBM Corp. in Boca Raton, FL. Wainwright was part of the small
group working on a portable tablet computer: a pen-based system that
permitted users to write on a screen, save the information and transfer it
to other computers by a cable.

The group was having trouble finding a name for the product. IBM had a
strong preference for its computers to be designated by numbers, as if
only machines that sounded like they had been invented by George Jetson
would be taken seriously by customers. The company had deviated from this
tradition when it started selling its desktop PC, calling it the IBM PC,
but the policy was still almost sacrosanct. Even so, the members of
Wainwright's group felt that a number was too impersonal for their tablet
computer.

Although many working on the project were young and more casual than
the prototypical IBMer, Wainwright was a throwback to an earlier era at
Big Blue. He was a gentle, formal man, invariably dressed in a suit and
tie. At a meeting, Wainwright held up the small notepad he always carried.
IBM used to issue the pads so employees could jot down to-do lists, or,
better yet, earth-shaking ideas. The pad, which was designed to fit into a
dress-shirt pocket, was bound in leather and embossed in gold with the IBM
motto, "Think." Displaying the little leather legacy of IBM's past,
Wainwright said, "Let's call it the Think pad."

The suggestion was more than a catchy bit of marketing. It connected
the tablet computer to the philosophical foundations of the company. By
1991, "Think" had become mainly a marketing mantra at IBM, but, for
founder Thomas Watson Sr., it epitomized his devout rationalism. In 1915,
Watson told employees: "All the problems of the world could be solved
easily if men were only willing to think." Within a few years this
optimism would be challenged by the brutality of World War I. But, Watson
and his son, Thomas Watson Jr., molded IBM in accordance with the
rationalist's cheerful faith, which manifested itself as a slow-moving,
orderly approach to product development, an obsessive concern for the
needs of the customers (which were tended by an impeccably groomed sales
force) and a benevolent paternalism toward employees. Ironically, the
ThinkPad, which would become symbolic of the "new IBM" and the approaching
21st century, was in many ways rooted in the company's past, a result of a
process first expounded by Watson Sr. This story is about that irony, and
the lessons to be learned if we are patient enough to watch the future
emerge from the past.

IBM helped push the personal computer into the mainstream when it began
selling its PC in 1981. Eventually, though, it lost control of the PC
marketplace, and didn't bring a portable to market until 1985. By then,
portables were already becoming smaller and lighter. Tandy had
scored in the market with its TRS-80 Model 100, a compact, lightweight
computer with an integrated word processor and modem. In 1986,
Toshiba unveiled a state-of-the-art portable line that became an
immediate hit. IBM followed with the 5140 Convertible PC, but it proved to
be nothing but an expensive doorstop made of dated technology.

--Jim Cannavino

In
1991, Dataquest, the San Jose-based market research firm, reported that
during the previous year the top five laptop vendors had shipped 547,000
notebook computers worldwide. Toshiba led the way with 230,000, and
Compaq Computer wasn't far behind at 200,000. IBM wasn't even on
the list, and Jim Cannavino was annoyed about that.

Cannavino was president of IBM's Entry Systems Division, a predecessor
of the IBM PC Co., and until then his career had run parallel with the
company's glory days. He had started out in 1963, a teenager with a
high-school diploma and a talent for repairing mainframes. He proved
equally adept with software and was promoted to lab director, where he
began his steady rise through the hierarchy.

For Cannavino, the PC-era was frustrating, particularly his stint as
the point man in IBM's battle with Bill Gates over the jointly developed
OS/2 operating system, which eventually lost to Microsoft's
Windows. But Cannavino saw an opportunity for IBM to get into the mobile
game when he spotted a prototype of a tablet computer. It had been
produced by GO, a start-up that was hoping its software would
become the standard operating system for pen products. "One of the first
things I had to do was replace 70% of my executives," recalls Cannavino,
who retired from IBM in 1995 and is currently CEO and chairman of
CyberSafe Corp. of Issaquah, WA, a network security provider. "The
decision-making process and development time at IBM were too slow for the
market, and the executives I replaced were the ones who didn't believe
change was required." Cannavino asked Kathy Vieth, a vice president with
wide-ranging marketing experience, to oversee the portable- and
pen-computing development team in Boca Raton.

"I thought Jim was onto something with the pen computer," says Vieth,
who today is retired from IBM and lives in Vail, CO, where she runs her
own consulting business. "IBM scientists are brilliant, but you don't
necessarily need brilliant for successful products. You need common sense
and street smarts. That was Jim Cannavino."

The name game

As the tablet neared completion and IBM was preparing to announce it to
the press, a battle was still going on over Wainwright's suggested name.
The pen-computing group wanted to call it ThinkPad. It felt that it was
crucial for such a personal product to be named something that would not
make consumers feel as if they had to graduate from MIT in order to use
it.

Debi Dell, who was a product manager in the group, recalls: "IBM's
corporate naming committee hated 'ThinkPad.' First, they were upset that
the computer didn't have a number. How could an IBM computer not have a
number? Then, since IBM sold so many products overseas, they were worried
because ThinkPad wouldn't translate easily into foreign languages."

When Vieth announced the product in the spring of 1992, she ignored the
corporate objections and simply referred to the tablet as the ThinkPad.

"The press loved it," says Dell. "And as soon as 'ThinkPad' caught on
with people, the naysayers changed their tune."

But the tablet found few buyers. As Paul Carroll, author of Big
Blues: The Unmaking of IBM (Crown Publishers Inc., 1993), observes,
the market had shifted again and become "more focused on helping people
communicate while on the move, rather than compute."

It so happened that IBM had that type of notebook computer under
development. In fact, the company was just six months away from releasing
it. But in early 1992, this computer also didn't have a name.

Two years before the tablet ThinkPad was announced, Cannavino became
convinced that future mobile machines should be developed at the IBM
design center in Yamato, Japan. The Japanese were more experienced with
consumer electronics than the Americans, and Cannavino felt their culture
provided them with an advantage that could not be duplicated in the United
States.

Cannavino explains: "In Japan, you'll find that competitors share more
technical information among themselves than departments do in a [U.S.]
company. The Japanese understand that a healthy industry is good for
everyone. We haven't quite learned that lesson over here."

At the time Cannavino was relocating the mobile development operation
to Japan, Tom Hardy was corporate manager of the IBM Design Program. Hardy
had watched his company's portable line fail in the United States, and
concluded that the aesthetics of a product as highly personal as a
notebook computer was at least as important as the technology it
contained. For some at IBM this was heresy. Yet IBM also had a history of
working with some of the world's most distinguished industrial
designers--Eliot Noyes, for instance, who played a lead role in the design
of the IBM Selectric typewriter.

--Jim Cannavino

Another of these designers was Richard Sapper. Since 1980, Sapper had
been an industrial design consultant to IBM. A German by birth, Sapper
left his job at Mercedes, set up a studio in Milan, Italy, and promptly
became famous for the spare, clean lines of his work--for instance, the
Tizio lamp--and other designs that have been exhibited at the Museum of
Modern Art.

In 1989, when Tom Hardy began managing the Design Program, he and
Sapper had numerous discussions about a method for differentiating IBM
products. They referred to it as the "personality strategy," which would
attempt to add some excitement and innovation in order to rebuild the
brand.

In the spring of 1990, preliminary work began on a notebook computer
that was aimed solely at the Japanese market and would be known as the
PS/55 Note. A meeting was held at Sapper's apartment/studio in Milan, the
top two floors of a lovely, old apartment house. Hardy recalls riding up
in a cage elevator with a wooden seat and thinking that his surroundings
were far more pleasant than an IBM office. Hardy and Sapper were joined by
Kazuhiko Yamazaki, the lead industrial designer of notebooks at Yamato,
and an executive named John Wiseman, who was serving as Cannavino's eyes
and ears.

Sapper felt that the design should be clean, plain and elegant. His
wooden prototype was based on the shoukadou bentou, the
traditional, black-lacquered, Japanese lunch box. It was small and
compact. Desk space is scarce in Japan, and, since security is an issue
with notebooks, a computer the size of a bentou box could be locked in a
filing cabinet.

After the design phase was completed, the wisdom of Cannavino's
decision to produce the notebook in the cooperative corporate environment
of Japan began to be realized. Several firms who competed with IBM or
supplied its competitors, collaborated on the project.

According to Kiyonori Sakakibara, a visiting professor at the London
Business School, who in 1994 published a study of ThinkPad development:
"Ricoh Co. Ltd. performed . . . the most critical task, assembling
the computer's two circuit boards, so densely packed that each [had] chips
on both sides. The black-and-white liquid crystal display was supplied by
Sharp Corp. and other Japanese manufacturers."

In the spring of 1991, the PS/55 Note was released in Japan and became
a best seller. It weighed barely over five pounds, and the coating of
soft, black, rubberized paint provided a pleasant tactile sensation when
you picked up the notebook.

The success of the PS/55 Note was in stark contrast to IBM's PS/2
Laptop, which had been released two weeks earlier in Europe and the United
States. The PS/2 had been designed by the IBM team in Boca Raton, and it
flopped.

In the fall of 1992, when IBM released a European version of the PS/55
Note, it also sold well. Cannavino had been briefed by Hardy during the
design and manufacturing of the new notebook, and Cannavino decided to
have Sapper and the Yamato team create one for the U.S. market. For two
years, Cannavino had been disappointed by IBM's inability to cut itself a
meaningful slice of the billions being spent on mobile computers. He saw
the problem as the inevitable result of the company's history.

"IBM had spent something like $30 million studying what size to make a
notebook," recalls Cannavino. "I finally said, 'The business market has
already decided what size they want it to be--81/2 by 11, like everything
else in an office.'

"Spending that kind of a money on such a simple question sounds crazy,
but IBM was geared to the lengthy development cycles of mainframes,"
Cannavino continues. "Each mainframe cost millions, so it made sense to
study the design for a long time. But PCs and portables were basically
consumer products, and the development cycle was moving down to about six
months.

"Right before Christmas in 1991," Cannavino says, "we had a big meeting
in Yamato, and I told the team I wanted the notebook done for the United
States by summer. None of my executives thought it could be done. I
disagreed and said we were staying in Japan--through Christmas and New
Year's if necessary--until we worked it out. Needless to say we were back
in the States before Christmas Eve. Six months, that was the key. We had
to be done in six months."

As Sapper and the Japanese team went to work on the new notebook,
forced to keep to Cannavino's drastically shortened timetable, they had no
idea one of the key technologies that would differentiate the ThinkPad was
languishing, unused, in IBM's labs.

--Ted Selker

TrackPoint's progress

No feature had a harder time finding a home in what would become the
ThinkPad line than the TrackPoint, the red-tipped pointing stub embedded
in the keyboard. Today, the TrackPoint is so symbolic of the brand that
IBM places a bright red dot over the "i," in ThinkPad advertisements and
brings up the same dot on the opening screens of its notebooks. Yet the
TrackPoint is the result of an eight-year journey that taught one
persistent IBM scientist and his supporters some frustrating lessons about
the alchemy of turning corporate innovation into gold.

In 1984, Ted Selker read a study that showed it took three-quarters of
a second for a computer user to shift his hand from the keyboard to the
mouse, and another three-quarters of a second to shift it back again.
Selker was a researcher at the Xerox Palo Alto Research Center
(PARC). He thought that if he could construct a mouse that didn't require
users to move their hands, he would save them time and trouble. Selker
built a model containing a pointing stick jutting up between the "G" and
"H" on a desktop keyboard, with two click buttons set into the bottom
edge. Unfortunately, Selker had other assignments, and he put his model on
the shelf.

Three years later, Selker was working as a scientist for IBM, and
showed the prototype to his colleague, Joseph Rutledge, a mathematician.
Selker recalls: "He loved it, and we went to work. The first and saddest
thing we learned was that 100 years of research says that sticks are not
good at pointing. Then we got even more depressed when our own study
demonstrated that finger-pressure control was an inefficient way to move a
pointer around a screen."

Over the next four years, Selker and Rutledge produced a functioning
prototype, discovering that if they slowed down the cursor and made the
movements of the stick less stiff, then people were able to use it
accurately and comfortably.

"I thought the pointing stick was an obvious idea," says Selker. "You
could get about 20% more editing time without handling a mouse. I started
showing it around IBM, and at conferences and trade shows. A lot of people
hated it. I did find some supporters, like John Cox, an IBM Fellow. John
had a stroke and when some of his co-workers visited him in the hospital
and asked if he wanted anything, John said, 'Get me one of Ted Selker's
keyboards.' "

A significant problem Selker and Rutledge faced was that since the days
of the Selectric typewriter, IBM has been renowned for its keyboards, and
the pointing stick violated the integrity of this revered legacy. In
addition, Selker and Rutledge soon realized that a product manager was the
one person who had the power to bestow a meaningful blessing on an
invention, but product managers also tended to be risk-averse--reluctant
to approve features not tested in the marketplace.

Selker observed this phenomenon first-hand. He remembers demonstrating
the new device for an executive high up the ladder who immediately carried
the keyboard to a product manager and said, "Isn't this great? Can we make
it?"

"Absolutely," the product manager replied. "As long as I'm not
responsible for my P and L's."

Selker's situation wasn't unique. Numerous inventions of IBM scientists
never escaped the lab. They were patented, and then deemed either useless
or unmarketable, and left to languish in filing cabinets and boxes.

IBM's X-Files?

Fortunately for Selker, Jim Cannavino had been fascinated by the
neglected technology for years. At the time, Cannavino was general manager
of IBM's Personal Systems Group, and on weekends he used to browse through
dog-eared files hoping to uncover a useful product.

"IBM scientists are brilliant, but you don't necessarily
need brilliant for successful products. You need common sense and
street smarts. That was Jim Cannavino."

--Kathy Vieth

When he read about the pointing stick,
Cannavino thought he saw something. He had long been concerned about how
you could sit on a plane with a notebook computer and have enough room to
manipulate the mouse. Cannavino disliked the current solution used by the
IBM development team in Yamato--the trackball. He got himself one of
Selker's and Rutledge's working prototypes, plugged it into his desktop
computer and tested it. Then he phoned Selker and said, "Ted, this is
great. How come we're not using it?"

"They won't let me," Selker said.

"Guess what, Ted," Cannavino replied. "I'm 'they.' "

Selker was thrilled by the call. "Jim had about 100,000 people working
for him," says Selker, but even Cannavino's support didn't guarantee that
the pointing stick would become a product, so Selker and Rutledge
published their pointing-stick research in a scientific journal.

"Then we did a press release over everyone's dead body," says Selker.
"BusinessWeek picked it up, and since the magazine is outside the
company, IBM executives took notice."

Meanwhile, running parallel to Selker's campaign, Hardy was championing
the pointing stick for the new notebook, and because his group oversaw the
company's 15 design centers around the world, they were positioned to push
the concept at IBM Japan.

"I also showed it to Bob Corrigan, who was head of the PC Co.," says
Hardy. "Bob thought it was terrific, and so did Richard Sapper. We really
needed the space-saving feature of the pointing stick, but, more
important, using it would build brand image and give IBM product
differentiation in a highly competitive market."

As a result of all these efforts, the pointing stick was put into
testing in Japan, but there was one last hurdle for it to clear, the
approval of Toshiyuki Ikeda, the notebook's product manager.

"I saw the first prototype of the TrackPoint, and it was not the equal
of the trackball," recalls Ikeda, currently the director of OEM System
Development for IBM. "I was reluctant to support a brand-new idea. But
then a tester commented that the trackball is used by Apple, and it
reminded the tester of our competitor's computers. Then I knew I had to do
something different, so I made the decision. Ted Selker did a super job
within a couple of months. We ran around to do-it-yourself shops in Japan
searching for different types of parts."

For Selker and Rutledge, the transformation of their invention into a
product was enormously satisfying. "What it taught me is that companies
should have incentive programs for their scientists to become
entrepreneurs [for their innovations]," says Selker.

Red badge of novelty

One final change made to the TrackPoint was suggested by Sapper. The
tip of Selker's and Rutledge's pointing stick had been black, a color that
got lost in the black ThinkPad keyboard. Sapper said, "Let it sing," and
the tip was changed to red, which brought about a closing act of corporate
silliness rivaled only by Abbott and Costello trying to decide who's on
first.

Hardy explains: "IBM had a cherished standard which said that the only
thing that could be red on a product was an emergency power switch, those
enormous switches on the mainframes. To have the little TrackPoint tip
subjected to this same standard was absurd, but, given the situation at
IBM then, we knew the red dot wouldn't get through the system. So we toned
it down a shade and called it magenta."

Soon afterward, Designer Yamazaki received a call from an IBM standards
watchdog, who wanted to know why manufacturing had produced these tiny red
parts.

Yamazaki said, "They're not red. They're magenta."

"No," replied the watchdog. "They're red."

The two men battled back and forth, then phoned Hardy to adjudicate the
argument.

"They aren't red, they're magenta," Hardy assured the standards
overseer, which led to a rambling, philosophical debate on the ontology of
redness. Still, the watchdog held his position--no red allowed, not even
if you called it magenta.

Hardy suggested that they take the argument to a higher level,
confident that the watchdog would shrink from continuing such a trivial
discussion with senior management. That was how it played out. The tip
kept its magenta classification, and in the coming years, with the
introduction of each new ThinkPad, the color of the rubber tip was
increased a shade until it finally became a bright red symbol of the
brand.

Peter Golden
has been a contributor to Newsweek and the Detroit Free
Press. Email him at pagolden@earthlink.net.

Electronic Business would like to thank Debi Dell and Dr. J. Gerry
Purdy for their generous assistance with this article. Debi Dell, who has
worked at IBM for 17 years, is currently national competency manager in
charge of IBM Mobile and Wireless Services. Dr. Gerry Purdy is an industry
analyst and president of Mobile Insights Inc. in Mountain View. Dell and
Purdy are the authors of a recently completed book on the ThinkPad.